http://blogs.orrick.com/trade-secrets-watch/files/2014/06/12Jun2014-200x150.jpgTrade secret misappropriation cases often are won or lost quickly and early at the preliminary injunction stage of the case.  However, today we report on the results of  a slow moving, long-running trade secret case that instead followed the adage, “good things come to those who wait.”  This case, MSC Software Corp. v. Altair Engineering, Inc., recently concluded with a largedamages verdict for the trade secret owner who just would not quit.

The plaintiff, MSC Software, is a global provider of integrated enterprise simulation software solutions – software that is capable of mathematically simulating real-world physical objects, enabling companies to test objects and assemblies without actually having to create a physical prototype.  MSC’s Adams The Multibody Dynamics Simulation Solution software, for instance, is used by engineers to study loads and forces on mechanical systems, information used in the design and development of automobiles and complex machinery.

In 2005, two MSC executives who had worked on all aspects of the Adams software left the company to join a competing company, Altair.  Over the next year, Altair had hired over 20 percent of MSC’s Adams software development group.  Not too long after the former MSC development group folks began working at Altair, Altair’s products allegedly became significantly more sophisticated, and Altair was able to market a product that directly competed with MSC’s Adams software.  This was something Altair had not previously been able to accomplish.

MSC filed its action in U.S. District Court in Michigan on July 5, 2007, alleging that Altair was only able to develop its competing product by using MSC’s confidential and trade secret information, including source code.  In April 2014, almost seven years later, and following a six-week trial, a jury returned a verdict in MSC’s favor.  The jury found that Altair misappropriated MSC’s trade secrets, and did so willfully and maliciously.  The jury also found that the former employees named in the suit breached not only their confidentiality agreements, but also their non-solicitation agreements.  MSC was awarded $26.1 million in damages for trade secret theft, plus an additional $425,000 for damages incurred as a result of the employee contract breaches.

Patience and conviction seemed to be pay off for this plaintiff.

 

Topics:  Confidentiality Agreements, Former Employee, Jury Awards, Jury Verdicts, Misappropriation, Non-Solicitation Agreements, Trade Secrets

Published In: Business Torts Updates, General Business Updates, Intellectual Property Updates, Labor & Employment Updates, Science, Computers & Technology Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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